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May 21
FNB is offering free banking services for two months what are others doing? PDF Print E-mail
Monday, 08 November 2010 09:26
JOHANNESBURG - First National Bank (FNB) is offering free banking services to all South Africans switching their accounts to it, in what could be seen as a bid to lure clients from rivals.

Some of FNB's competitors remained speechless after the announcement; while others were still convinced they had compelling product offerings and looked to improve customer experience.

FNB said the offer applied to its silver, gold, and platinum personal cheque accounts. According to pricing executive James Fowle, customers looking to switch need not worry about moving debit orders as his bank would do this on their behalf free of charge. Fowle said FNB will also deliver the bank card at a time and place convenient to the customer.

"The latest offer is designed by FNB to make it less cumbersome and cheap for new customers to move bank accounts to FNB. This is the country's first," Fowle said.

"There are two fundamental reasons why many people are reluctant to switch banks globally. One is the high cost and the burden associated with switching banks. Our latest offer of two months free banking is a mechanism to facilitate the move by the customer between banks. By offering two months free banking, we're alleviating the cost burden involved when customers switch banks."

Asked how Standard Bank (JSE:SBK)  would respond to this offering, a spokesman said: "Standard Bank believes that it offers its customers a comprehensive range of products and services that meet their financial needs...We think we have compelling product offerings as well."

Nedbank (JSE:NED) said it had implemented modest, below or in line with inflation increases. The bank said its fees were unchanged from 2004 levels in 2005. In 2006 and 2007 Nedbank says it reduced charges by 13% and 6%, respectively.


"We are constantly looking at ways in which we can improve our customer experience, underpinned by our great value banking position of simplicity, affordability and transparency," said Lisa Linfield, Nedbank's executive of transactional products.

Absa (JSE:ASA) and Capitec were speechless on how they would respond to FNB's offering. Absa and Standard Bank have been labelled by a Solidarity report as one of the most expensive banks in South Africa, while Capitec and FNB are said to be the cheapest.